How certifications can help grow your business?

Certification can significantly help your business gain access to government contracts. Whether you are just starting a business or your company is already established, you can drastically benefit from these "set aside" contracts. There are several government agencies at the local, state or federal level which offer certification.

If your business wants to connect with private-sector buyers, simply contact NMSDC's (National Minority Supplier Development Council) 37 regional councils. NMSDC will provide you with a standard application process along with requested verified documents. The council has many corporate members, including Marriot and IBM, and connects to over 17,000 minority-owned suppliers. If you pass the certification regulations, your business may participate in an advanced training program, the Business Consortium Fund's Working on Capital Loan Program, and many NMSDC business opportunity fairs.

How can MBEs participate in the HUB Zone program?

The HUB (Historically Underutilized Business) Zone Empowerment Contracting Program is statutorily authorized to stimulate economic development and create jobs in urban and rural communities by providing Federal contracting preferences to small businesses.

In order to qualify for participation in the HUBZone program, a small business must be located in a "historically underutilized business zone. A "HUBZone" is an area that is located in a qualified census tract or a qualified "non-metropolitan county." These areas are defined in the Internal Revenue Code as having a median household income of less than 80 percent of the State median household income or with an unemployment rate of not less than 140 percent of the statewide average, based on US Department of Labor recent data; or lands within the boundaries of federally recognized Indian reservations. Additionally, to qualify as a HUBZone firm, a business must be owned and controlled by one or more US Citizens, and at least 35% of its employees must reside in a HUBZone.

A competitive HUBZone contract can be awarded if the contracting officer has a reasonable expectation that at least two qualified HUBZone small businesses will submit offers and that the contract can be awarded at a fair market price. In rare instances sole source HUBZone awards are permitted. However, a sole source contract can be awarded only if two or more qualified HUBZone firms will not likely submit offers and the government estimate will not exceed $5 million for manufacturing or $3 million for all other requirements. Also, price evaluation preferences may be given to HUBZone firms submitting offers on requirements to be filled through full and open competition. A firm that is certified both 8(a) and HUBZone may qualify for additional preference points.

Many MBEs have found that they are located in areas designated as HUBZones and many have successfully applied for HUBZone certification. However, many others have been challenged by the HUBZone residential employee requirement. MBDA and our resource partners can provide counseling to MBEs that seek to achieve HUBZone status.

Section 8(a) Business Development Program

The section 8(a) business development program is statutorily authorized to provide a vehicle through which Federal agencies can make prime contract awards to small businesses owned and controlled by individuals certified as socially and economically disadvantaged. Federal agencies are authorized to set aside specific requirements for competitions limited to 8(a) participants, and sole source awards may be made to participants where their dollar values do not exceed, inclusive of options, $5 million for manufacturing requirements and $3 million for all others.

To qualify for the program, a small business must be certified by SBA. By law, certain groups may be presumed to be socially disadvantaged. The legislation specifically refers to the likelihood that African Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, and Subcontinent Asian Americans are socially disadvantaged. Other individuals can be admitted to the program if they show through a "preponderance of the evidence" that they are disadvantaged because of race, ethnicity, gender, physical handicap, or residence in an environment isolated from the mainstream of American society.

In order to meet the economic disadvantage test, all individuals must have a net worth of less than the applicable threshold, excluding the value of the business and personnel residence. Successful applicant firms must also meet applicable size standards for small business concerns; be in business for at least two years (absent a waiver); and display a reasonable potential for success.

It is important that MBEs understand the requirement for “potential for success"? If SBA finds that a small MBE lacks that potential, the MBE will not be certified for 8(a) participation, and about half the minority applicants for the 8(a) program are denied certification based on this or economic reasons. The SBA regulations determine potential for success in terms of:

Access to credit and capital, including, but not limited to, access to long-term financing, access to working capital financing and bonding capability;

Technical and managerial experience of the applicant concern's managers, the operating history of the concern, the concern's record of performance; and

Requisite licenses if the concern is engaged in an industry requiring professional licensing.

Once certified, a firm is approved for program participation for nine years following notification of approval, and remains SDB certified for three years following the date of its last annual review.

What opportunities are available to MBEs who are Veterans?

Many minority group individuals have served America in the armed forces, and are eligible to take advantage of programs and services for veterans and service-disabled veterans. In 1999, the law expanded the eligibility for certain small business assistance programs, including those administered by SBA, to include veterans, and directed Federal departments and agencies establish and achieve a participation goal of 3% of the total value of all prime contract and sub-contract awards for each fiscal year for small businesses owned and controlled by veterans with service-connected disabilities.

There are no set-aside programs for veterans. There is, however, a 3% Federal prime contract and 3% subcontracting goal for all Federal agencies to achieve that applies to service-disabled veteran-owned small businesses. The 3 % contract goal for Federal agencies applies only to service-disabled veteran-owned businesses, not veteran-owned small businesses. According to the law, a concern owned and controlled by veterans or service-disabled veterans is a small business concern which is at least 51 percent owned by one or more veterans or service-disabled veterans; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more veterans or service-disabled veterans; and, whose management and daily business operations are controlled by one or more veterans or service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent care-giver of such veteran.

Registering on the Vendor Information Pages (VIP) database is a way of self-certifying your status as a VOSB or SDVOSB. If you are a veteran business owner who is not already registered, please go to www.vip.vetbiz.gov to register your business. Click here for eligibility requirements.

It is very important to note that Federal buyers can receive credit toward their veteran-owned small business goals by utilizing a small veteran-owned business that is also a GSA schedule holder. Thus, an MBE who is a veteran should very seriously consider obtaining a schedule contract and aggressively marketing federal purchasers for issuances of task orders against their schedules.

What opportunities are there for MBEs in Women-Owned Business (WOB) programs?

Of course, many MBEs are owned and controlled by women. Minority group women have substantial representation in the 8(a) and SDB programs and Women-Owned Businesses (WOBs) are awarded the majority of DOT DBE contract and subcontract dollars. Federal departments and agencies establish annual goals for contracting with WOBs, and some have achieved success in increasing WOB participation in prime and subcontracting. The FAR defines a WOB as a small business concern at least 51 percent owned by one or more women; or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one or more women. The management and daily business operations must also be controlled by one or more women.

The federal government does not require any formal certification for women-owned small businesses that are proposing as prime contractors on federal procurements. If your business meets the definition as stated above, and you are submitting a proposal for Federal procurement, you can "self-certify." To self-certify your firm as a WOSB with the federal government, you must meet the definition listed in FAR 19.001. The reason that there is no certification requirement for prime contracts is because there are no preference programs to award prime contracts to women-owned small business. In addition, there are private, national women's business organizations that certify qualified women-owned businesses.